Design, Sites, and Data Sources
At each AutoSave pilot site, an employer collaborated with a bank or credit union to design and implement an AutoSave plan that allowed employees to open savings accounts without leaving their workplaces; streamlined the process of opening accounts; and established regular, automatic deposits. Contributions to AutoSave accounts were made with direct-deposit transfers from after-tax, take-home pay. The federally insured, low-cost or no-cost accounts were structured both to encourage saving and not to penalize savers who might need access to their funds. Workers had control of their savings and were able to withdraw money at any time without penalty.
The initial pilot employers included a Southern California distribution warehouse for a national drugstore chain; a small, for-profit light-industrial firm in New York City; a nonprofit provider of vocational training and computer refurbishing, also in New York City; a nonprofit human services agency located in the Midwest; and selected departments of two large municipal employers, located on the east and west coasts. The pilot test had a special focus on generating participation among low- to moderate-income workers, but all employees were eligible to sign up. The pilot test collected data on sign-up rates, deposit amounts, and participation. Interviews and focus groups were conducted with employees, employers, and financial institutions. In addition, the project team analyzed the feasibility of an “opt-out” enrollment model, examining federal and state regulations about how employers deliver wages to their employees, including the allowable uses of payroll cards.
The opt-in AutoSave program was fully implemented with six employers. More than 300 employees volunteered to participate. Overall participation rates ranged from 2 percent to 62 percent of all employees at targeted workplaces, with most sites ranging from 9 percent to 25 percent. At sites where wages were tracked, the majority of participants had wage levels within the lower three-fifths of the wage distribution in the workplace. These participation results were consistent with expectations for the opt-in program design.
Opt-out enrollment was not pilot tested because after assessing the legal and operational risks, MDRC concluded that while this approach would presumably be legal in some states, a lack of regulations or case law addressing the model meant that employers would be taking undue risks to implement it. In the absence of such guidance or precedent, as of 2015 MDRC determined that it was not feasible to implement the opt-out enrollment program design, even by using a payroll card with an attached savings product.